Olympic Steel Reports 35% Growth in 2017 Second-Quarter Net Income

First-Half 2017 Net Income Triples, on 30% Higher Sales

Board Declares Regular Quarterly Cash Dividend

August 03, 2017 06:10 AM Eastern Daylight Time

CLEVELAND--(BUSINESS WIRE)--Olympic Steel Inc. (Nasdaq: ZEUS), a leading national metals
service center, today announced significantly improved financial results
for the three- and six-month periods ended June 30, 2017.

Net sales increased 30% in 2017’s second quarter, to $356.2 million,
compared with $273.6 million in net sales during the same quarter last
year. Year-to-date net sales also rose 30%, reaching $691.1 million,
versus $532.0 million in the first six months of 2016. Higher shipping
volume and higher selling prices accounted for the year-over-year
increase in net sales for both periods.

“Demand for our products has been steadily improving since late last
year,” said Chairman and Chief Executive Officer Michael D. Siegal.
“With increased customer demand, we continue to outpace the overall
market and have increased our market share. This is attributable to our
customer service exemplified by consistent on-time delivery and
dependable quality.”

Second-quarter net income in 2017 was $4.8 million, or $0.42 per diluted
share, compared with net income of $3.6 million, or $0.32 per diluted
share, in 2016’s second quarter. Net income in the second quarter of
2017 was negatively impacted by $0.4 million, or $0.02 per diluted
share, of LIFO expense recorded in the quarter. There was no LIFO impact
in the same quarter of last year. In addition, 2017 second-quarter net
income was reduced by $0.03 per diluted share related to the net loss
generated by the Siler City, North Carolina facility, which the Company
closed in July.

Net income in the first half of 2017 surged to $12.5 million, or $1.10
per diluted share, up from $2.8 million, or $0.25 per diluted share in
2016’s comparable period. First-half 2017 results include LIFO expense
totaling $0.8 million, or $0.04 per share, compared with no LIFO impact
in the first half of 2016. As previously disclosed, an out-of-period
income tax adjustment recorded in the first quarter of 2017 resulted in
a one-time reduction of income tax expense. That adjustment increased
net income in the first half of 2017 by $1.9 million, or $0.17 per
diluted share.

The Company’s Board of Directors also approved a regular quarterly cash
dividend of $0.02 per share, which is payable on Sept. 15, 2017, to
shareholders of record on Sept. 1, 2017.

Conference Call and Webcast

A simulcast of Olympic Steel’s 2017 second-quarter earnings conference
call can be accessed via the Investor Relations section of the Company’s
website at www.olysteel.com.
The simulcast will begin at 10 a.m. EDT on Aug. 3, and a replay of the
call will be available for approximately 14 days thereafter.

Forward-Looking Statements

It is the Company’s policy not to endorse any analyst’s sales or
earnings estimates. Forward-looking statements in this release are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements are typically
identified by words or phrases such as “may,” “will,” “anticipate,”
“should,” “intend,” “expect,” “believe,” “estimate,” “project,” “plan,”
“potential,” and “continue,” as well as the negative of these terms or
similar expressions. Such forward-looking statements are subject to
certain risks and uncertainties that could cause actual results to
differ materially from those implied by such statements. Readers are
cautioned not to place undue reliance on these forward-looking
statements. Such risks and uncertainties include, but are not limited
to: general and global business, economic, financial and political
conditions; competitive factors such as the availability, global
production levels and pricing of metals, industry shipping and inventory
levels and rapid fluctuations in customer demand and metals pricing;
cyclicality and volatility within the metals industry; the strengthening
of the U.S. dollar and the related impact on foreign steel pricing, U.S.
exports, and foreign imports to the United States; the levels of
imported steel in the United States and any associated tariffs and
duties; the availability and costs of transportation and logistical
services; the successes of our strategic efforts and initiatives to
increase sales volumes, maintain or improve working capital turnover and
free cash flows, improve our customer service, and achieve cost savings,
including our internal program to improve earnings; our ability to
generate free cash flow through operations and repay debt within
anticipated time frames; events or circumstances that could impair or
adversely impact the carrying value of any of our assets; risks and
uncertainties associated with intangible assets, including additional
impairment charges related to indefinite lived intangible assets; events
or circumstances that could adversely impact the successful operation of
our processing equipment and operations; the amounts, successes and our
ability to continue our capital investments and strategic growth
initiatives, including our business information system implementations;
the successes of our operational initiatives to improve our operating,
cultural and management systems and reduce our costs; the ability to
comply with the terms of our asset-based credit facility; the ability of
our customers and third parties to honor their agreements related to
derivative instruments; customer, supplier and competitor consolidation,
bankruptcy or insolvency; reduced production schedules, layoffs or work
stoppages by our own, our suppliers’ or customers’ personnel; the
impacts of union organizing activities and the success of union contract
renewals; the timing and outcomes of lower of cost or market adjustments
and last-in, first-out, or LIFO, income or expense; the ability of our
customers (especially those that may be highly leveraged, and those with
inadequate liquidity) to maintain their credit availability; the
inflation or deflation existing within the metals industry, as well as
our product mix and inventory levels on hand, which can impact our cost
of materials sold as a result of the fluctuations in the LIFO inventory
valuation; the adequacy of our existing information technology and
business system software, including duplication and security processes;
the adequacy of our efforts to mitigate cyber security risks and
threats; access to capital and global credit markets; our ability to pay
regular quarterly cash dividends and the amounts and timing of any
future dividends; our ability to repurchase shares of our common stock
and the amounts and timing of repurchases, if any; unanticipated
developments that could occur with respect to contingencies such as
litigation, arbitration and environmental matters, including any
developments that would require any increase in our costs for such
contingencies; and changes in laws or regulations or the manner of their
interpretation or enforcement could impact our financial performance and
restrict our ability to operate our business or execute our strategies.

About Olympic Steel

Founded in 1954, Olympic Steel is a leading U.S. metals service center
focused on the direct sale and distribution of large volumes of
processed carbon, coated and stainless flat-rolled sheet, coil and plate
steel and aluminum products. The Company’s CTI subsidiary is a leading
distributor of steel tubing, bar, pipe, valves and fittings, and
fabricates pressure parts for the electric utility industry.
Headquartered in Cleveland, Ohio, Olympic Steel operates from 30
facilities in North America.